CFPB Director Speaks at American Bankers Association

22 Oct

At the American Bankers Association’s annual conference in New Orleans this week, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said loan originators face huge advantages under the agency’s mortgage rules that will take effect January.

 

The CFPB issued its Ability-to-Repay rule—also known as the Qualified Mortgage or QM rule—earlier this year in order to prevent bad lending practices.  The purpose of the rule is to make sure consumers are getting mortgages they can afford to pay back.

 

In addition to the QM rule, CFPB also issued mortgage servicing rules designed to correct many “sloppy and unsatisfactory practices” and to ensure fairer and more effective processes for borrowers at risk of losing their homes.

 

Both rules were “desperately needed” by the financial industry, Cordray said, as they have paved the way for the agency to issue guidance on how to comply with them, while also helping to resolve ambiguities and unclear interpretations when the rules were proposed in January 2013.

 

“For example, under the statute you would not have been permitted to charge any points or fees on any loan on which you paid compensation to any loan originator, regardless of whether that was your own employee or a mortgage broker,” Cordray said.

 

CFPB specified the effective date of its mortgage rules for January 2014.

 

“The central concept behind this project is our belief that compliance with regulations is a concern we all share, because successful compliance is good for everyone—consumers, industry, and regulators,” Cordray said. “We believe that working together makes the process go more smoothly, attains greater understanding, and helps achieve better results.”

 

“We believe that such a marketplace is the right outcome for all involved, and will lead to more stable and sustainable financial conditions that strengthen the future of this country,” Cordray said.
adapted from Reverse Mortgage Daily
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